The euro has recovered most of its election losses against the pound, as worries over the possibility of the UK leaving without a trade deal weigh on the pound. It has also been helped by encouraging data releases this morning, with Italian consumer and business confidence showing an increase, and Spanish balance of trade moving upwards.
Yesterday was a largely positive day for the Eurozone; Italian construction figures came in much better than expected, and French business confidence crossed over the 100 line once again.
New ECB research shows that interest rates could go further low still. Even though this does not represent an actual opinion from the central bank, it does open the door for talk of further cuts. According to the paper, even a cut to -1% would still not hit the reversal rate point where the cuts start to be harmful. The deposit rate is currently at -0.5%.
